ABSTRACT
This chapter reviews the changes in the Lithuanian welfare system between 1998 and 2018: How has the Lithuanian welfare state system evolved over the period of the last 20 years? The development of the Lithuanian welfare system over the period of 20 years shows, in the words of Peter Hall, signs of ‘continuity’, ‘discontinuity’, and ‘reversal’ at the same time. Major changes were implemented during the period of 1990–2000, implying discontinuity when an autonomous social insurance fund was created in Lithuania and the social security system became funded on a pay-as-you-go basis. A paradigmatic shift could also be observed when a three-pillar pension reform was implemented (in 2004), meaning a partial privatisation of pension insurance. Nevertheless, since then there have only been incremental reforms, even during the crisis. We can also observe a reversal in family policy, when universal family allowances were introduced in 2004, retrenched in 2008, and then reintroduced in 2018. The most pressing challenges of the Lithuanian welfare system today are how to raise the social insurance budget so as to meet the demographic challenge and increase benefit levels simultaneously.
